Unpacking the 88th Legislature: Retired Educator COLA

Texas AFT Retiree Plus member Lydia Carrillo-Valdez shares her experiences at a press conference with other retired educators, as well as Rep. John Bryant, Rep. Mihaela Plesa, and Texas AFT Secretary-Treasurer Ray McMurrey.

Educators in Texas who have retired over the past two decades have never received an increase to their monthly pension. Even those who retired before then have only received a slight increase to their monthly annuities. Meanwhile, consumer prices have increased by more than 60% in Texas over the past twenty years.

According to state law, increases to annuities for retirees under the Teacher Retirement System of Texas (TRS) require an action by the legislature. The vast majority of other teacher retirement systems across the U.S. have an automatic system for providing cost-of-living adjustments (COLAs) to retired educators as the prices of consumer goods increase. Texas does not.

Session after session, retirees across Texas have asked the state to provide them with a cost-of-living adjustment, and session after session, retirees were provided with band-aids.

Unpacking the Legislature

Read our other breakdowns of public education issues:

School Safety
School Employee Pay
Educator Recruitment
School Funding
Higher Education

Instead of a cost-of-living adjustment, which would permanently increase a retiree’s annuity, in 2019 and 2021 the legislature offered a “13th check,” a one-time payment to certain TRS retirees that was less than or equal to their monthly annuity payment. While this one-time infusion of funds is appreciated, it doesn’t address the root issue: the purchasing power of retiree pensions has significantly declined and needs to be adjusted immediately.

The legislative session began with a $32.7 billion budget surplus. After years of advocacy and after years of inflation, retirees needed and deserved a significant increase.

What Passed … or Didn’t

The legislative session began with  Lt. Governor Dan Patrick talking about a 13th check. On February 13, when Patrick announced his legislative priorities for the 88th session, he stated that SB 10 would add “13th Checks for Retired Teachers.”

With a $32.7 billion budget surplus, retirees would not accept crumbs. They would not accept another bandaid. 

Thanks to the emails, postcards, and calls to the legislature, by March 10 when SB 10 was actually filed, the bill included both a one-time check for certain retirees as well as a COLA. 

During the legislative process, the Texas House considered its own plan which included two pieces of legislation: HB 600 and HJR 2. The House plan required HJR 2 to provide funding for the COLA. HJR 2 is a constitutional amendment to get around legislative spending limits. The legislature can only spend a certain amount in the base budget, but these limits do not apply to constitutionally dedicated spending. The Senate intended to fund its COLA plan in the base budget and would not have required a constitutional amendment.

Constitutional amendments require voter approval in Texas. While the originally filed version of the bill was written in such a way that every component of the bill was contingent on the passage of a constitutional amendment, the final version of the bill was written so that only the COLA is contingent on the passage of the constitutional amendment on the November 2023 ballot, not the one-time supplemental check. Regardless of voter approval retirees will receive a 13th check.

The constitutional election will take place this November. Election day is Tuesday, Nov. 7. The early voting period is between Monday, Oct. 23 and Friday, Nov. 3. This ballot initiative must pass for retirees to receive a COLA.

Both the House and Senate plans went through several iterations throughout the legislative process. The final version of plan, SB 10 and HJR 2, includes portions of both the House and Senate plans.

The COLA distribution is tiered in the following ways:

  • those who retired on/before Aug 31, 2001 receive a 6% COLA, 
  • those who retired after Aug. 31, 2001 and on/before Aug. 31, 2013 receive a 4% COLA, and
  • those who retired after Aug. 31, 2013 and on/before Aug. 31 2020 receive a 2% COLA. 

If voters approve the COLA, the adjustment will take effect in January 2024. 

Certain TRS retirees will also receive a one-time supplemental check. Those between 70 and 74 years old on Aug. 31 2023 will receive a $2,400 check. Those 75 years or older on Aug. 31 2023 will receive a $7,500 check. Those checks will go out in September of this year, regardless of the November election result.

The COLA and 13th check applies for all TRS retirees, regardless of their classification. The COLA portion of the plan costs the state about $3.3 billion, while the supplemental check costs the state about $1.6 billion. The entire cost of both components will be covered by the state. 

Throughout the legislative process, Texas AFT pushed for a more robust COLA. Thanks to our member advocacy, the COLA will be paid by the state up front and not out of existing TRS funds or through a contribution increase paid by active educators. We ended this session with a COLA, not just another 13th check.

However, we didn’t get all that we wanted. Texas AFT fought to include more recent retirees in the COLA plan. We fought to increase percentages for each tier included in the COLA plan. We fought to have the COLA funded by the base budget, not from a constitutional amendment.

While this COLA is a significant win, it is long overdue and doesn’t make up for the almost 2 decades that some retirees have gone without any increase.

What Legislators Are Saying

Despite not providing retirees with a “COLA” that reflects the actual increases in the cost-of-living and despite enacting no structural changes to someday allow for ongoing COLA increases as inflation continues to rise, some legislators are congratulating themselves on a job well done. 

They will say they supported retired educators in their campaign literature and they will mention the COLA in their stump speeches.

But they need to know that the job isn’t over. The COLA that they offered retirees is not enough to cover their increased expenses due to inflation. They need to know that retirees will be back to the capitol next session to fight for the benefits that they deserve and earned, and they need to know that retirees will show up to the polls for the COLA election this November and legislative elections next November.

In the words of Cheryl Anderson, the former Chair of Texas AFT Retiree plus who started the group and tragically passed away last year, “We are here to stay and not going away.”

What to Expect Next

This week, Gov. Greg Abbott signed SB 10, but unfortunately that’s not the last step in the process.

Due to the way the COLA is structured, Texans will have to go to the polls this November to vote for the COLA. While legislators have stated that they will campaign for the COLA, it was their decision to structure it in such a way that it requires voter approval. 

When crafting a budget, Legislators are confined to certain constitutional limits on how much they can spend. If they want to exceed those limits, they have to get voter approval via constitutional election. Typically, they will put popular and uncontroversial spending (such as retiree COLAs) on the ballot with the expectation that they will pass. Retirees deserve to have their COLA guaranteed. The roughly $3.3 billion that will go toward funding a retiree COLA could have and should have been guaranteed in the budget, not pushed to a November election.

In order to send a message to legislators, we can’t just win. We have to win big. The constitutional amendment is expected to pass, but in order to send a message that retirees need a significant COLA, that a retiree COLA is popular, and that public educators and retirees get out and vote, we must exceed expectations. If legislators see that retirees come out and vote this November, then they can know to expect retirees to come out to the polls next November, when legislatures themselves are on the ballot.

The exact language of the constitutional amendment as it will appear on voters’ ballots this November is as follows: 

“The constitutional amendment authorizing the 88th Legislature to provide a cost-of-living adjustment to certain annuitants of the Teacher Retirement System of Texas.”

Voters will be provided with a choice of “yes” or “no” on the amendment. If there are more “yes” than “no” votes, the amendment passes.

Texas AFT is planning to campaign hard for a TRS COLA this Fall. In the lead up to the election we plan to coordinate with grassroots organizers and labor leaders across the state to support the push for the COLA at the polls. Keep up to date with the Texas AFT Hotline and follow Texas AFT on social media for updates closer to the election.